What is the certainty equivalent wealth?

A) $315.26

B) $357.81

C) $378.12

D) $392.38

What is the maximum premium of insurance he is willing to pay to fully cover the loss?

A) $98.21

B) $108.48

C) $136.92

D) $142.19

How much is the risk premium?

A) $45.63

B) $53.29

C) $60.59

D) $68.57

A person has a utility function of U(W)=ln(W) and his current wealth is $500.He faces the possible losses of $120 and $450 this year and the distribution of his wealth after the possible losses is as follows. Note: The inverse function of U(W)=ln(W) is W=eu